Nintendo (NTDOY) Stock Plunges 8.4% on Switch 2 Pricing and Disappointing Forecast

Key Takeaways

• Shares of Nintendo tumbled 8.4% in Tokyo trading, hitting 7,020 yen—the lowest point since August 2024
• The Switch 2 console price increased up to 20% across major markets due to escalating memory chip costs fueled by AI industry demand
• The company projects 16.5 million Switch 2 sales for the current fiscal year, a decline from the 19.86 million units sold since launch
• Operating profit guidance of 370 billion yen fell significantly short of analyst expectations at 480 billion yen
• Industry experts suggest Nintendo’s forecast may be deliberately conservative, with Morningstar predicting 19 million unit sales

Nintendo shares suffered a significant decline Monday following the release of annual earnings results and forward guidance that disappointed the investment community.

Tokyo trading saw the stock drop 8.4% to close at 7,020 yen—marking the lowest valuation since August of last year. Year-to-date, the stock has declined 34% in 2026.

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Operating profit for the fiscal year concluding March 31 climbed approximately 28% to reach 360 billion yen, supported by net sales that nearly doubled. However, these figures fell short of market projections.

The company’s projections for fiscal 2027 sparked additional investor unease. Nintendo anticipates operating profit at 370 billion yen, considerably below the analyst consensus of 480 billion yen. Revenue is projected to decline 11.4% to 2.05 trillion yen.

Central to investor concerns is the Switch 2 console. The gaming giant expects to move 16.5 million units during the current fiscal period—a notable decrease from the 19.86 million units shipped since the June 2025 launch.

Rising Switch 2 Costs Dampen Sales Expectations

Last Friday, Nintendo revealed price adjustments for the Switch 2 across major territories including the United States, Japan, and Europe. American consumers face a $50 increase, while Japanese buyers will pay 10,000 yen more. These adjustments represent increases ranging from 7% to 20% depending on the market.

The driving force: escalating memory chip costs propelled by AI infrastructure investment. Rising component expenses are compressing hardware margins and are anticipated to weaken consumer appetite.

Software projections also raised red flags. Nintendo forecasts combined Switch and Switch 2 software sales of 165 million units for fiscal 2027—representing an approximately 11% year-over-year contraction. This outlook has sparked questions regarding the company’s confidence in its upcoming game releases.

Market participants are eagerly awaiting news of a “Nintendo Direct” presentation to showcase upcoming titles, especially those featuring beloved franchises like Mario and Zelda.

Market Experts Question Conservative Projections

Not all analysts share the pessimistic outlook. Nintendo has an established pattern of providing cautious forecasts, and several industry observers believe this situation follows that trend.

Kazunori Ito, director at Morningstar, characterized the guidance as “overly conservative.” He anticipates Switch 2 sales will hit 19 million units this fiscal year, surpassing Nintendo’s official projection. Ito also predicts software sales of 205 million units, substantially higher than the company’s 165 million estimate.

On a positive note, Nintendo highlighted a robust third-party software catalog scheduled for upcoming months. Initial Switch 2 releases including “Mario Kart World” and “Pokémon Pokopia” have delivered strong results—the latter moved over 4 million copies within its first five weeks.

Toto suggested that a new Nintendo Direct event outlining the 2026 game lineup could arrive as early as next month.

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